Last Friday, Florida Governor Ron DeSantis signed a bill revoking Disney World’s self-governing status, after formally seeking to strip Walt Disney Co. of its tax deal with the state. De Santis sought this change after the entertainment company’s public opposition to the “Don’t Say Gay” law, but Disney World might be able to keep its self-governing status after all.
Just before DeSantis signed the law last Friday, he said the special tax district was a “partnership that developed early on with Walt Disney — I don’t think Walt would appreciate what’s going on with this company right now,” he said.
The controversial legislation is scheduled to take effect in June of 2023, allowing a period that could help both sides find a resolution.
This week, the Reedy Creek Improvement District says that Florida cannot legally dissolve Disney’s self-governing entity until the state covers their $1 billion in debt. Last week, Reedy Creek also sent a letter to bondholders citing the 1967 law, stating that Florida “will not in any way impair the rights or remedies of the holders…until all such bonds together with interest thereon, and all costs and expenses in connection with any act or proceeding by or on behalf of such holders, are fully met and discharged.
“In light of the State of Florida’s pledge to the District’s bondholders, Reedy Creek expects to explore its options while continuing its present operations, including levying and collecting its ad valorem taxes and collecting its utility revenues, paying debt service on its ad valorem tax bonds and utility revenue bonds, complying with its bond covenants and operating and maintaining its properties,” the letter to bondholders continued to read.
When Florida created the Reedy Creek Improvement District decades ago, the state pledged to protect the district’s bondholders.
Many county officials in Orange and Osceola counties worry that the dissolution of the RCID would leave them with an enormous tax burden on their residents since they would need to cover the outstanding debt.
Attorney Jacob Schumer, an Orange County attorney who specializes in local government and property litigation, says that the state has several options to address the situation and “and maybe make the case not so clear cut. But as the law stands, I can’t see any way it holds up against a challenge,” a WMFE reporter wrote.
So, Disney may be able to keep its self-governing status after all, but what will happen as tensions rise between Florida and the Reedy Creek Improvement District?
